ECONOMY: EU looks to bolster crisis fund as IMF pledges action

The EU is working to strengthen its bailout fund it has emerged as the US and China called for immediate action to avoid contagion at an IMF summit in Washington Saturday. The IMF pledged collective action on the debt crisis.

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The tapering of stimulus by the U.S. Federal Reserve risks reigniting Europe’s debt crisis and pushing weak countries into a “debt-deflation spiral”, the International Monetary Fund has warned.
“The macro-economic environment continues to deteriorate. Recovery remains elusive,” said the IMF in its annual health check on the eurozone. “Growth has weakened further and unemployment is still rising. Mounting social and political tensions pose an increasing threat to reform.”

WASHINGTON (Reuters) - The International Monetary Fund on Tuesday appeared to be inching toward a deal on boosting its financial firepower with Japan, Sweden and Denmark committing a total of $77 billion to help contain the euro zone debt crisis. The pledges by the three countries come ahead of IMF and World Bank meetings and a Group of 20 finance leaders gathering in Washington this week. Informal meetings kick off on Thursday ahead of official sessions on Friday and Saturday. ...

GIVEN the dismal weather reports from much of the world economy, and most notably the euro zone, the International Monetary Fund's stock of provisions has been looking a little thin. Yet it has not been easy to imagine a straightforward way to increase the funds available to the IMF.

BRASILIA (Reuters) - French Finance Minister Christine Lagarde pledged to push reforms to give Brazil and other emerging economies more influence at the International Monetary Fund as she kicked off a worldwide tour on Monday to win support for her candidacy to lead the global lender.